Chương 2 Nghị định 64/2002/NĐ-CP: Xử lý tài chính và xác định giá trị doanh nghiệp trước khi cổ phần hoá

Chapter II

FINANCIAL HANDLING AND VALUATION OF TO BE-EQUITIZED ENTERPRISES

Article 9.- Assets leased, borrowed and accepted as joint-venture and association capital, unneeded assets, assets invested from the reward and/or welfare funds

Before equitization, the enterprises must inventory, classify and take initiative in handling, their assets according to the following regulations:

1. For assets which they have leased, borrowed or accepted as joint-venture and/or association capital, and other assets not under their ownership: The enterprises must liquidate the contracts or reach agreements with the asset owners so that the joint-stock companies can take over the already signed contracts or sign new ones.

2. For assets which are no longer needed by the enterprises, unused and awaiting liquidation: The enterprises shall liquidate or sell them or report to competent agencies for transferring them to other units according to current regulations. For those assets which have not yet been handled by the time of equitization, they shall not be calculated into the enterprises value and the joint-stock companies shall be authorized to continue preserving and handling them or to transfer them to functional State organizations for reception and settlement.

3. For assets belonging to welfare facilities: creches, kindergartens, infirmaries and other welfare assets invested from the reward and/or welfare funds, they shall be transferred to the laborers collectives in the joint-stock companies for management and use through the trade union organizations.

Particularly for dwelling houses of officials, employees and workers, including those invested with the State budget capital, they shall be transferred to the local land and housing agencies for management or sale to the present occupiers according to current regulations.

4. For assets being used in production or business, which were invested from the reward funds and/or welfare funds of the enterprises, they shall be calculated into the value of the equitized enterprises and converted into shares to be owned by laborers working in these enterprises at the time of equitization according to the actual working duration of each laborer.

Article 10.- Receivable debts

The enterprises shall have to compare, certify, recover and handle receivable debts before they are equitized under the current mechanisms. Where there remain bad debts at the time of equitization, they shall be handled as follows:

1. For debts which are adequately evidenced to be irrecoverable and neither personal nor collective responsibility can be identified, they shall be offset by the reserve sources; if the reserve sources are not enough, the deficit shall be deducted into the business results and profits at the time of equitization. Where the above-said sources are still not enough, the deficit shall be deducted into the State capital portions at the enterprises before they are equitized.

2. For those debts which are irrecoverable due to subjective causes and the responsibility therefor has been imputed to some individuals and/or organizations, such individuals and/or organizations shall be handled and must pay compensation therefor. If there remains any loss as the debts cannot be fully recovered, it shall be handled under the provisions in Clause 1 of this Article.

3. For receivable debts which have been overdue for 3 or more years, the debtors still exist but are unable to repay them, and the enterprises cannot recover them though they have taken many measures, they shall be handled under the provisions in Clause 1 of this Article.

4. For other overdue receivable debts, the enterprises may sell them to organizations with the debt-buying and -selling function. The loss resulting from the debt sale shall be handled under the provisions in Clause 1 of this Article.

Article 11.- Payable debts

1. The enterprises must mobilize every source of capital to pay due debts before they are equitized or negotiate with the creditors on how to handle them or convert them into equity capital.

The conversion of debts into equity capital shall be determined through the results of the auctions of shares, or be agreed upon by the enterprises and creditors but they must not be lower than the prices of shares sold to other subjects outside the enterprises.

2. Where the enterprises meet with difficulties in repaying overdue debts, such debts shall be handled as follows:

a/ For tax and budget debts: The enterprises shall have them frozen, rescheduled or written off or receive investment capital supports under the Government’s stipulations;

b/ For outstanding debts owed to commercial banks: The enterprises shall reach agreement with the lending banks in order to have such debts rescheduled, frozen, written off or their interest rates lowered, or to convert the loans into equity capital.

The commercial banks shall have to handle outstanding debts according to current regulations;

c/ For guaranteed foreign debts, the guarantors and the enterprises must reach agreement with the creditors so as to freeze, reschedule or reduce them, and arrange sources of capital for repaying them. If they fail to reach agreement thereon, the guarantors must pay the debts to the creditors. The enterprises shall then have the responsibility to make repayment to the guarantors or reach agreement with them on converting such debts into capital contributed to the joint-stock companies;

d/ For foreign debts which the enterprises have borrowed by themselves without guarantee, the enterprises shall have to arrange sources to repay them or reach agreement with the creditors on handling them or converting them into capital contributed to the joint-stock companies according to law provisions.

Article 12.- Reserves and undistributed profits

The reserves for inventory price decrease, bad debts, securities price decrease, exchange rate difference, job-loss allowances, financial reserves � and undistributed profits must be handled under current regulations before the valuation of to be-equitized enterprises. Where the enterprises have previous years accumulated losses, they shall be allowed to use the pre-tax incomes earned up to the time of equitization to offset them before taking the measures prescribed at Points a and b, Clause 2, Article 11 of this Decree.

Article 13.- Assets contributed as capital to joint ventures with foreign countries

1. Where the equitized enterprises take over joint-venture activities, all of their assets contributed as joint-venture capital shall be determined on the principles laid down in Article 18 of this Decree so as to valuate the equitized enterprises.

2. Where the equitized enterprises do not take over joint-venture activities, they shall report such to competent agencies so as to handle the assets contributed as joint-venture capital as follows:

a/ Reaching agreement on buying or selling the contributed joint venture capital;

b/ Transferring them to other enterprises to act as new partners.

Article 14.- Cash balances of the reward and welfare funds

The cash balances of the reward and/or welfare funds shall be distributed to the laborers currently working at the enterprises to buy shares. Laborers shall not have to pay income tax on these incomes.

Article 15.- Value of equitized enterprises

1. The actual value of an enterprise shall be the value of all the existing assets of the enterprise at the time of equitization, taking into account its profitability acceptable by both share buyers and sellers. The actual value of the State capital portion at an enterprise is its actual value minus the payable debts and the reward and/or welfare fund balances.

2. The actual value of an equitized enterprise shall not include:

a/ The value of the assets specified in Clause 1, Article 9 of this Article;

b/ The value of assets no longer needed or assets awaiting liquidation;

c/ Bad debts already deducted into the enterprise’s value;

d/ Expenses for uncompleted capital construction of projects which were suspended prior to the time of valuation of the enterprise;

e/ Long-term investments in other enterprises, which competent agencies have decided to transfer to other partners;

f/ Assets belonging to welfare works invested from the enterprise’s reward and/or welfare funds, and dwelling houses of its officials, employees and workers.

Article 16.- Bases for determining the actual value of enterprises

1. Data on the enterprise’s accounting books at the time of equitization.

2. The quantity and quality of assets based on the inventory and classification of actual assets of the enterprise at the time of equitization.

3. Technical properties of assets, their use demands and market prices at the time of equitization.

4. The enterprise’s land use right value, business advantages regarding its geographical location and prestige, monopolistic nature of its products, designs and trademarks (if any).

5. The enterprise’s profitability determined on the basis of the ratio between profits and the owner’s capital of the enterprise.

Article 17.- Determination of the quality of assets, the land use right value and the value of business advantages of enterprises

1. The quality of an enterprise’s assets shall be determined on the basis of the capability to ensure safety in their operation and use, the product quality and the environment.

2. The land use right value:

a/ For the immediate future, the land lease and assignment policies shall still apply according to current regulations.

The People’s Committees of the provinces and centrally-run cities shall have to re-calculate the land rents at convenient locations for uniform application to all types of enterprises.

b/ For land areas assigned by the State to the enterprises for dealing in housing and infrastructures, the land use right value must be included into the value of the equitized enterprises. This land use right value shall be determined according to the land use right-transfer levy bracket set by competent agencies and must not be lower than the costs already spent on compensation, ground clearance and leveling

3. The value of an enterprise’s business advantages shall be determined on the basis of the average ratio between the after-enterprise income tax profits and the State capital at the enterprise, averaged in three years preceding the equitization as compared with the interest rate of the Government’s bonds with a ten-year term at the nearest time, and multiplied by the value of the State capital portion at the enterprise at the time of valuation.

If the value of the enterprise’s trademark is accepted by the market, it shall be determined according to the market value.

Article 18.- Determination of the value of assets contributed as joint-venture capital

1. The value of assets contributed as joint-venture capital which is calculated into the value of the equitized enterprise shall be determined on the basis of:

a/ The value of the owner’s capital reflected on the financial statements of the joint-venture company at the time closest to the time of valuation of the equitized enterprise, which has been audited by an independent auditing organization;

b/ The equitized enterprise’s percentage of capital contributed to the joint venture;

c/ The rate of exchange between the foreign currency contributed as joint-venture capital and Vietnam dong, based on the average transaction rate on the inter-bank market announced by the State Bank of Vietnam at the valuation time for application to joint-venture companies applying accounting in foreign currencies.

2. The value of assets contributed as joint-venture capital, which is determined on the aforesaid bases, shall serve as the basis for valuating the equitized enterprises; the value of the joint-venture capital contribution on the investment licenses shall not be adjusted.

Article 19.- Methods of valuation of enterprises

Depending on the characteristics of the business and/or production lines as well as the practical conditions of each enterprise, different methods shall be allowed to be applied to valuate the equitized enterprises under the guidance of the Finance Ministry.

Article 20.- Organizing the valuation of equitized enterprises

1. The agencies competent to decide on the enterprise equitization shall decide to set up councils for valuation of equitized enterprises or select auditing companies or economic organizations with the valuating function so that the equitized enterprises can sign contracts therewith for determining their value.

2. A council for valuation of an enterprise shall be composed of:

a/ A representative of the agency which has decided on the enterprise equitization, as its chairman;

b/ A representative of the finance agency;

c/ Leading officials of the to be-equitized enterprise and a representative of the State corporation (if the enterprise in question is a corporation member).

Basing itself on the actual situation of the enterprise as well as specific requirements, the council may invite more organizations or technical, economic and/or financial specialists inside and outside the enterprise necessary for evaluating the quality and determining the actual value of assets of each type in the enterprise.

3. The councils for valuation of enterprises shall have the responsibilities to:

a/ Evaluate the results of asset inventory, classification and assessment and determine the value of the to be-equitized enterprises according to current regulations within 15 days as from the date the decisions to set up the councils are issued. The councils’ evaluation results shall be recorded in written minutes which are signed by all full-fledged members of the councils;

b/ Re-determine the results on the enterprise’s value if so requested by the agencies competent to decide on the enterprise equitization.

The councils for valuation of enterprises shall be accountable for the accuracy of the results of the enterprise valuation.

4. Auditing companies and economic organizations which have valuated the enterprises must ensure the current regulations and completed their jobs according to the schedule set in the signed contracts, must be accountable for the accuracy and validity of the valuation results. The costs paid for hiring the enterprise valuation shall be calculated into the equitization costs of the enterprises.

5. The enterprise valuation results must be sent to the agencies competent to decide on the enterprise equitization for decision and publicization.

Article 21.- Use of the enterprise valuation results

The results of valuation of enterprises under the provisions of this Decree shall serve as the basis for determining the structure of the sale of first-time shares, for realizing the preferential treatment policies for laborers in the enterprises, the raw-material producers and suppliers, and for determining the "floor" prices so as to hold the sale of shares to subjects outside the enterprises.

Article 22.- Adjustment of the value of equitized enterprises

The agencies competent to decide on the enterprise equitization shall consider and decide on the adjustment of the enterprises value in the following cases where:

1. Enterprises meet with difficulties in selling shares under the provisions of Clause 5, Article 24 of this Decree.

2. The enterprise�s value is re-determined during the period from the time of valuation to the time the enterprise is officially transformed into a joint-stock company.